Regularization of Daily Wage Workers: Supreme Court clarifies applicability of State Government policies in Haryana Rajya Sainik Board vs. Mohan Lal (2008)

Date of the Judgment: September 11, 2008

Judges: Justice R. V. Raveendran and Justice Lokeshwar Singh Panta

Can a social welfare organization be compelled to regularize a daily wage employee based on State Government policies? The Supreme Court addressed this question in the case of Haryana Rajya Sainik Board-cum-Defence & Security Relief Fund & Member Management Committee vs. Mohan Lal & Anr. The court clarified that policies meant for State Government departments do not automatically apply to independent bodies registered under the Societies Registration Act, particularly when the organization has its own set of service rules.

Case Background:

The case revolves around Mohan Lal, who was appointed as a Mali (gardener) on a daily wage basis by the Haryana Rajya Sainik Board-cum-Defence & Security Relief Fund & Member Management Committee (referred to as “the Committee”) on October 1, 1991. The Committee is a social welfare organization registered under the Societies Registration Act, 1860, with the objective of supporting war widows, ex-servicemen, and their dependents. Mohan Lal’s services were terminated on February 27, 1993, due to the temporary nature of his employment.

Timeline:

Course of Proceedings:

Mohan Lal challenged his termination under the Industrial Disputes Act, 1947, arguing that Section 25-F was not followed. The Labour Court initially ruled in his favor, ordering reinstatement without back wages. Subsequently, Mohan Lal filed a writ petition in the High Court of Punjab and Haryana, seeking regularization based on a State Government policy dated March 7, 1996, which provided for the regularization of work-charged/casual/daily-rated employees. The High Court allowed the writ petition, directing the Committee to regularize his services. The Committee’s review petition was dismissed, leading to the appeal before the Supreme Court.

Legal Framework:

The case involves the interpretation and application of the following:

• Societies Registration Act, 1860: The Committee is registered under this Act, establishing it as an independent entity.
• Industrial Disputes Act, 1947: Mohan Lal initially claimed relief under this Act, alleging violation of Section 25-F, which deals with the procedure for retrenchment of workmen.
• Section 25-F of the I.D. Act: “Conditions precedent to retrenchment of workmen. – No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until- (a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days average pay [for every completed year of continuous service] or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette].”
• Haryana Government Policy Instructions dated 07.03.1996: These instructions pertain to the regularization of work-charged/casual/daily-rated employees of the State Government departments.
• Sainik Parivar Bhawan’s Haryana Service (Common Cadre) Rules, 1999: These are the specific service rules framed by the Committee for regulating the recruitment and service conditions of its employees.

Arguments:

Appellant-Committee’s Arguments:

• The Committee is an independent entity registered under the Societies Registration Act, 1860, and its finances come from the Defence Security Relief Fund, primarily raised through public donations.
• The Committee is not a Government Department, a statutory body, or an instrumentality of the State.
• The State Government’s policy on regularization does not automatically apply to the Committee’s employees, as the Committee has its own service rules.
• The post of Mali is reserved for ex-servicemen/war widows under the Sainik Parivar Bhawan’s Haryana Service (Common Cadre) Rules, 1999.

Respondent-Mohan Lal’s Arguments:

• Mohan Lal argued for the applicability of the State Government’s policy on regularization, claiming that he fulfilled the conditions for regularization as a daily-wage employee.
• He sought a directive from the High Court to compel the Committee to regularize his services, granting him the benefits of a regular employee.

Issues Framed by the Supreme Court:

1. Whether the High Court was justified in applying the State Government’s policy decision/instructions regarding regularization to the employees of the appellant-Committee.

Treatment of the Issue by the Court:

Authorities:

The judgment does not explicitly cite specific cases or books as authorities. However, it refers to the following legal provisions:

• Societies Registration Act, 1860: This Act governs the registration and operation of the appellant-Committee.
• Industrial Disputes Act, 1947: This Act was invoked by the respondent to challenge his termination.
• Haryana Government Policy Instructions dated 07.03.1996: This policy was the basis for the respondent’s claim for regularization.
• Sainik Parivar Bhawan’s Haryana Service (Common Cadre) Rules, 1999: These rules govern the service conditions of the Committee’s employees.

Judgment:

The Supreme Court allowed the appeal, setting aside the High Court’s order directing the Committee to regularize Mohan Lal’s services. The Court held that the State Government’s policy on regularization could not be automatically applied to the employees of the Committee, as it is an independent body with its own service rules.

How each submission made by the Parties was treated by the Court?

What weighed in the mind of the Court?:

The Court emphasized the independent nature of the Committee, its funding sources, and the existence of its own service rules. These factors weighed heavily in the Court’s decision to overturn the High Court’s order.

Fact:Law

Logical Reasoning:

Key Takeaways:

• State Government policies on regularization do not automatically apply to independent organizations registered under the Societies Registration Act.
• Organizations with their own service rules are governed by those rules, not by general State Government policies.
• The source of funding for an organization can be a factor in determining its independence from the government.

Development of Law:

The case clarifies that independent organizations with their own service rules are not automatically bound by State Government policies intended for government departments. This reinforces the principle that such organizations have the autonomy to govern their internal affairs, including employment matters, according to their own rules and regulations.

Conclusion:

The Supreme Court’s judgment in Haryana Rajya Sainik Board vs. Mohan Lal clarifies the scope and applicability of State Government policies on regularization of daily wage employees. The Court emphasized that independent organizations with their own service rules are not automatically bound by such policies, reinforcing their autonomy in managing their internal affairs.